DBRS Confirms All Classes of DBJPM 2017-C6 Mortgage Trust

DBRS Limited (DBRS) confirmed the ratings on the following classes of Commercial Mortgage Pass-Through Certificates, Series 2017-C6 issued by DBJPM 2017-C6 Mortgage Trust:

-- Class A-1 at AAA (sf)
-- Class A-2 at AAA (sf)
-- Class A-3 at AAA (sf)
-- Class A-SB at AAA (sf)
-- Class A-4 at AAA (sf)
-- Class A-5 at AAA (sf)
-- Class A-M at AAA (sf)
-- Class X-A at AAA (sf)
-- Class B at AA (high) (sf)
-- Class X-B at AA (low) (sf)
-- Class C at A (high) (sf)
-- Class D at BBB (sf)
-- Class X-D at BBB (high) (sf)
-- Class E-RR at BB (high) (sf)
-- Class F-RR at BB (low) (sf)

All trends are Stable.

This transaction closed in June 2017, at a trust balance of $1.1 billion. At issuance, the transaction consisted of 41 loans secured by 196 properties. Per the May 2018 remittance, the pool has experienced a collateral reduction of 0.3% with all loans remaining in the pool. Approximately 73.2% of the pool is reporting YE2017 financials, with a weighted-average (WA) debt service coverage ratio (DSCR) and debt yield of 1.78 times (x) and 9.4%, respectively. At issuance, the pool reported a DBRS WA Term DSCR and debt yield of 2.02x and 9.9%, respectively. The top 15 loans in the pool are reporting a DBRS WA Term DSCR of 2.24x and debt yield of 9.5%, respectively.

There is one loan on the servicer’s watchlist (Prospectus ID#31 – Long Meadow Farms), representing 0.9% of the current pool balance and there are no loans in special servicing. The above loan was added to the servicer’s watchlist as it is being monitored for possible delinquency. There are eight loans, representing 33.4% of the current pool balance, that are backed by properties in urban or super dense urban markets.

Two of the top five loans (Gateway Net Lease Portfolio and Olympic Tower), representing a combined 14.6% of the pool, were shadow rated investment grade at issuance. In its analysis for this review, DBRS confirmed that the performance of these loans remains consistent with investment-grade loan characteristcs. At issuance, DBRS assigned a shadow rating on 245 Park Avenue (Prospectus ID#1 – 8.3% of the current pool). The loan was shadow rated because of the strong sponsorship of HNA Group Co., Ltd. (HNA Group), substantial market equity and moderate debt yield for a property located in a low cap market. Recent news articles state that HNA Group is in the process of selling the property because of the debt burden it is currently facing as well as pressure from the Chinese government to slow international spending. Due to the uncertainty surrounding HNA Group, DBRS has removed the shadow rating from this loan.

Classes X-A, X-B and X-D are interest-only (IO) certificates that reference a single rated tranche or multiple rated tranches. The IO rating mirrors the lowest-rated applicable reference obligation tranche adjusted upward by one notch if senior in the waterfall.

All ratings will be subject to ongoing surveillance, which could result in ratings being upgraded, downgraded, placed under review, confirmed or discontinued by DBRS.

For more information on this transaction and supporting data, please log into www.viewpoint.dbrs.com. DBRS will continue to monitor this transaction with periodic updates provided in the DBRS Viewpoint platform.

As part of this review, DBRS has provided updated analysis and in-depth commentary in the DBRS Viewpoint platform for the following loans in the transaction:

-- Prospectus ID#1 – 245 Park Avenue

For complimentary access to this content, please register for the DBRS Viewpoint platform at www.viewpoint.dbrs.com. The platform includes issuer and servicer data for the entire CMBS universe, as well as deal and loan-level commentary for all DBRS rated transactions.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is CMBS North American Surveillance, which can be found on dbrs.com under Methodologies. For a list of the Structured Finance related methodologies that may be used during the rating process, please see the DBRS Global Structured Finance Related Methodologies document on www.dbrs.com. Please note that not every related methodology listed under a principal Structured Finance asset class methodology may be used to rate or monitor an individual structured finance or debt obligation.

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at info@dbrs.com.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.

The rated entity or its related entities did participate in the rating process for this rating action. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.